Daily Willis Review | 10 May 2018

Daily Willis Review |10 May 2018
  • Citizens approved for $1.42 billion reinsurance program
  • Prudential and PIC enter sixth longevity reinsurance agreement
  • MIGA to share risk with NEXI through reinsurance
  • XL Catlin establishes insurance hub in San Francisco
Citizens approved for $1.42 billion reinsurance program
Florida’s Citizens Property Insurance Corporation has received approval from its board of governors to purchase a $1.42 billion reinsurance program for 2018, the risk transfer blog Artemis has reported.

The new program is a 7% increase on the total limit of risk transfer secured last year and includes more coverage from the capital markets via Everglades Re cat bonds.

As part of its renewal this year, Citizens will combine traditional reinsurance with fully-collateralized coverage, including its Everglades Re cat bonds.

Citizens said its strategy was to: “Transfer risk alongside the FHCF, transfer commercial non-residential (CNR) risk, and transfer aggregate annual risk in order to protect a portion of surplus for most catastrophic events and thereby further reducing the amount and likelihood of assessments beyond the 1-100 year event to the citizens of Florida.”

Prudential and PIC enter sixth longevity reinsurance agreement
Pension Insurance Corporation (PIC) has entered into its sixth longevity reinsurance agreement with Prudential Retirement, a unit of Prudential Financial.

As part of the agreement, PIC will assume the longevity risk for £900 million ($1.2 billion) in pension liabilities, representing approximately 7,500 pensioners across two pension schemes.

According to the release, the agreement is a result of a growing desire among companies to de-risk their pensions.

Tom Cahill, Director of Prudential’s longevity reinsurance team, said: “We at Prudential are proud to strengthen our growing partnership with Pension Insurance Corporation.

Jay Shah, Chief Origination Officer at Pension Insurance Corporation, said: “This agreement represents the sixth major reinsurance transaction between the PIC and PICA teams during the past three years.”

MIGA to share risk with NEXI through reinsurance
The Multilateral Investment Guarantee Agency (MIGA) has signed a memorandum of understanding with NEXI, Japan’s official export credit agency.

The MoU is an agreement to share risk, through reinsurance, on investments made by Japanese firms in developing countries.

As part of the arrangement, MIGA and NEXI will share risk by purchasing reinsurance policies from each other, reducing the exposure either would face individually.

Currently, MIGA provides over $2 billion in guarantees for investments made by Japanese firms across the globe, representing the fourth highest among investor countries.

Keiko Honda, MIGA Executive Vice President and Chief Executive Officer, said: “MIGA’s strategy for the next few years focuses on mobilizing private capital to three priority areas: clean energy, fragile and conflict-affected situations, and low-income countries.”

Kazuhiko Bando, NEXI Chairman and CEO, said: “Through the MoU, MIGA and NEXI are expected to use their own strengths to help Japanese companies develop effective investment projects.”

XL Catlin establishes insurance hub in San Francisco
XL Catlin’s North America Construction insurance business has opened a multi-line underwriting hub in San Francisco.

Charles Marmolejo has been appointed Executive Underwriter and Senior Underwriter Dan McCarthy will join the hub from XL Catlin’s Chicago office.

In his new role, Mr. Marmolejo will help construction clients address their general liability, workers’ compensation and commercial auto risks.

He brings with him almost 29 years’ property and casualty insurance experience across a range of industry segments.

Mr. McCarthy first joined XL Catlin’s North America Construction team in 2014 in Chicago and in his new role he will assist brokers in helping address customers’ excess liability risks throughout the Western region.

Gary Kaplan, President of XL Catlin’s North America Construction, said: “Construction activity throughout the Western region, especially California, is bustling with a wide range of public and private projects in progress and more plans in the works.”